The majority opinion has remanded this case to give the trial judge an
opportunity to reconsider its sanction ruling under the factors outlined in the opinion. The
test adopted by the majority opinion sets out an appropriate standard for trial judges to use
when considering the imposition of sanctions on a party under the trial court's inherent
authority. Therefore, I concur in the judgment of the majority opinion. I write separately,
however, to underscore that the egregious conduct in this case warranted the sanction
imposed by the trial judge and thus, no remand is necessitated.
We observe that the compelling facts of the instant case and applicable law fully support the trial court's ruling imposing sanctions. It should be emphasized that this is not a case of one private litigant innocently seeking to talk directly with another litigant without either party's counsel being present. Rather, this is a case where a sophisticated corporation deliberately lied to a litigant for the purpose of contacting the litigant without his counsel's knowledge, and improperly sought to influence the litigant to settle the case. . . . [The defendant] acknowledged to the trial judge and the jury at trial that [the defendant's] conduct . . . was “wrong.” [The defendant] is a sophisticated business entity with substantial experience in the world of litigation. The fact that [plaintiff's] lawyer had specifically advised [the defendant] at a deposition not to discuss settlement with [the plaintiff] is merely cumulative; [defendant's] conduct would have been “wrong” even if [plaintiff's] lawyer had not had the occasion to make such a statement to [the defendant]. [The defendant's] misconduct was a deliberate effort to subvert and circumvent both the attorney-client relationship and the ordinary rules and procedures of litigation. This relationship and these rules and procedures are central to the fair working of our legal system and to the public's confidence in the courts.
Kocher, 216 W. Va. at 60 n.3, 602 S.E.2d at 503 n.3.
It is clear from the observations made in Kocher and the principles set out in
the instant case that this Court does not approve of a party unilaterally contacting another
party. This position recognizes the highly aggressive nature of civil litigation today, which
makes unsophisticated plaintiffs extremely vulnerable to unscrupulously high pressure tactics
by corporate defendants.
Support for the position taken in Kocher and the principles in the instant case
may be found from the fact that a defendant may be sued for initiating direct contact with a
plaintiff and settling a claim. There is no question that “[a] [plaintiff] has an absolute right
to cancel a retainer agreement, discharge an attorney at any time, and independently settle
a case without being liable for breach of contract.” Marks v. Struble, 347 F. Supp. 2d 136,
144 (D.N.J. 2004). However, “those who encourage or cause a rupture in the attorney-client
relationship by means of fraud, coercion, or other wrongdoing are not justified in doing so.” Ferris v. South Florida Stadium Corp., 926 So. 2d 399, 402 (Fla. Dist. Ct. App. 2006).
Stated differently, “while the law does not bind a client to an attorney merely because she has
entered into a contingent fee contract, the Court will vigorously protect this contractual
relationship when a third party willfully interferes with this relationship by inducing the
plaintiff-client to discharge her attorney and settle with the third party.” Jackson v. Travelers
Ins. Co. of Hartford, Conn., 403 F. Supp. 986, 998-99 (M.D. Tenn. 1975). Consequently,
When a third person intentionally interferes with [the attorney-client] relationship for his own benefit, either by
unlawful means or by lawful means where there is a lack of sufficient justification, by inducing a client to terminate the relationship with his attorney or otherwise act with the intent to deprive the attorney of his remuneration, a cause of action arises in tort for the damages resulting from that act.”
State Farm Mut. Ins. Co. v. St. Joseph's Hosp., 489 P.2d 837, 841 (Ariz. 1971). Furthermore, “To be actionable the conduct of the [defendant] need not necessarily be
egregious in nature but only intentional for the improper purpose of inducing the client to
repudiate his contract and settle directly with the [defendant].” Ronald M. Sharrow,
Chartered v. State Farm Mut. Auto. Ins. Co., 511 A.2d 492, 499 (Md. 1986). See also
Edwards v. Travelers Ins. of Hartford, Conn., 563 F.2d 105 (6th Cir. 1977) (affirming
judgment for attorney in action against defendant that induced attorney's client to settle
case); State Farm Fire Ins. Co. v. Gregory, 184 F. 2d 447, 448 (4th Cir. 1950) (affirming
judgment for attorney after finding evidence was sufficient “to support the conclusion that
the adjuster obtained the settlement by inducing the insured to abandon his lawyer and save
the fee which he had contracted to pay”); Marks v. Struble, 347 F. Supp. 2d 136, 144 (D. N.J.
2004) (“New York courts, even though retainer agreements are terminable at will, recognize
an attorney's cause of action against a third party who interferes with the attorney's
contingency fee agreement by inducing the client to enter into an independent settlement
agreement.”); Ellis Rubin, P.A. v. Alarcon, 892 So. 2d 501 (Fla. Dist. Ct. App. 2004)
(holding that attorneys stated a cause of action for tortious interference with a business
relationship as a result of defendant's direct contact with their client and subsequent
settlement of case with their client); Knell v. State Farm Mut. Auto. Ins. Co., 336 N.E.2d 568,
572 (Ill. App. Ct. 1975) (holding that an attorney has a cause of action against a defendant
in an underlying action, when “it was either alleged or shown that the [attorney's] client was
induced by or conspired with the defendant to breach or terminate his contract with an
attorney.”). Moreover, plaintiff's counsel may obtain punitive damages against a defendant
for wrongfully contacting his/her client to settle the underlying claim. See Cross v. American
Country Ins. Co., 875 F.2d 625, 632 (7th Cir. 1989) (“On the facts of this case, we believe
that punitive damages were properly awarded. From the evidence that defendant told
Patterson to come to its office to settle without his lawyer, told him that he did not need a
lawyer and that litigation takes a long time, the jury was entitled to conclude that the
company intentionally induced Patterson to breach his contract and that its conduct was of
a willful, wanton, and malicious nature.”).
To the extent that a defendant seeks to have direct contact with a plaintiff, I
suggest the following procedure be utilized so one does not violate Rule 4.2. Prior to a
defendant having direct contact with a plaintiff, the plaintiff's counsel must be informed by
defense counsel that such contact is desired. It is the duty of plaintiff's counsel to inform
his/her client that the defendant wishes to have direct contact with the plaintiff, either in
person or through written or other form of communication. If the plaintiff consents to such
direct contact, plaintiff's counsel has a duty to inform the defendant's counsel that defendant
can have direct contact with the plaintiff only under the circumstances approved of by the
plaintiff. (See footnote 2) See Bowens v. Atlantic Maint. Corp., 546 F. Supp. 2d 55, 90 (E.D.N.Y. 2008)
(granting a protective order to prevent defendant from directly contacting plaintiffs); Murton
v. Measurecomp, LLC, No. 1:07CV3127, 2008 WL 5725628, at*6 (N.D. Ohio, Dec. 2, 2008)
(requiring defendant to submit any offer of judgment to plaintiffs' counsel and not to
plaintiffs).
[t]he client-lawyer relationship is structured to function within an adversarial legal system. In order to operate within this system, the relationship must do more than bind together a client and a lawyer. It must also work to repel attacks from legal adversaries. Those who are not privy to the relationship are often purposefully excluded because they are pursuing interests adverse to the client's interests. MNC Credit Corp. v. Sickels, 497 S.E.2d 331, 334 (Va. 1998) (internal quotations and citation omitted).
In the instant case, Richmond American attempted to thwart the plaintiffs'
attorney-client relationship by offering their counsel a job. This egregious conduct by
Richmond American was a blatant attempt to undermine “the attorney-client relationship and
imperil the sanctity of the highly confidential and fiduciary relationship existing between
attorney and client.” Learning Curve Int'l., Inc. v. Seyfarth Shaw, LLP, 911 N.E.2d 1073,
1080 (Ill. App. Ct. 2009). In my judgment, this conduct alone was invidious enough to
warrant imposition of default judgment against Richmond American. The integrity of the
attorney-client relationship cannot tolerate attempts by defendants to “buy-off” opposing
counsel to facilitate an unfair settlement of claims against them.
When Richmond American failed in its attempt to “buy-off” plaintiffs' counsel,
it made a tactical decision to drive a wedge between the plaintiffs and their counsel. It did
this initially by having defense counsel ask plaintiffs' counsel to allow defense counsel to
have direct contact with the plaintiffs. When this effort failed, Richmond American took the
deliberate and calculated step of going directly to the plaintiffs with a malicious letter that
was designed to interfere with, and sabotage, the attorney-client relationship between the
plaintiffs and their counsel. (See footnote 3) The trial court's order specifically found that the intent of the
letter sent by Richmond American was “to sow discord and distrust between counsel for the
Plaintiffs and the Plaintiffs themselves[.]” The letter stated in part: “It is my understanding
that your attorney chose not to send this letter to you; therefore I am making the offer directly
to you.” This statement accuses plaintiffs' counsel of deliberately failing to inform the
plaintiffs of a purported partial settlement offer. This accusation implicitly suggests to the
plaintiffs that they cannot trust their attorney, and that their attorney has elevated his interests
above their interests.
In addition to attacking the integrity of plaintiffs' counsel, the letter also sought
to intimidate the plaintiffs into accepting Richmond American's offer of partial settlement.
The letter did this by stating the following: “This offer is intended to be admissible in court
should this lawsuit progress.” It is quite obvious that this statement was designed to place
pressure on the plaintiffs to accept the partial settlement, or run the risk of having a jury be
informed that they refused the offer. In making this groundless threat, Richmond American
knew, but the plaintiffs did not, that “[t]he well established and widely recognized general
rule is that an unaccepted offer to compromise a disputed claim is not admissible as
evidence[.]” Shaeffer v. Burton, 151 W. Va. 761, 770, 155 S.E.2d 884, 891 (1967). Accord Lively v. Rufus, 207 W. Va. 436, 449, 533 S.E.2d 662, 675 (2000) (“[W]e find that the circuit
court did not err by excluding the 'Settlement and Indemnification Agreement.'”); Schartiger
v. Land Use Corp., 187 W. Va. 612, 617, 420 S.E.2d 883, 888 (1991) (“The trial court
properly excluded the evidence of an offer of settlement under Rule 408,
W. Va. R. Evidence.”). See also Brynwood Co. v. Schweisberger, 913 N.E.2d 150, 160
(Ill. App. Ct. 2009) (“It is well settled that offers of settlement and compromise are not
admissible into evidence.”); McMullen v. Kutz, 985 A.2d 769, 774 (Pa. 2009) (“[A]n offer
to compromise a claim, not accepted, cannot be introduced into evidence[.]”). In the final
analysis, to condone the conduct of Richmond American “would deprecate and lessen the
sanctity of the attorney-client [relationship].” United States v. Edwards, 39 F. Supp. 2d 716,
746 (M. D. La. 1999). Consequently, I believe the trial court was correct by imposing the
sanction of default judgment. I also believe the record will support such a sanction on
remand under the test outlined in the majority opinion.